Thinking about leaving money to charity in your will? It’s a good way of giving back to your community or to a cause that’s close to your heart. Before you do, we’ll take you through the process and what you might need to consider before writing your will.
How to leave money to a charity in your will
There are 2 ways to leave money to charity in your will in the UK. You can:
Name a registered charity or charities in your will and specify that you’d like to leave them a donation.
When you leave a donation to a charity in your will, it’s important to remember to add their charity number along with the rest of their details. This is because charities can change their name and contact details. Adding the charity number makes sure that the donation will still reach them, even if they’ve changed their name after you made your will.
If you want to donate to a smaller charity that’s less well-known it’s a good idea to check that they’re registered with the Charity Commission. This will confirm that they’re a trustworthy organisation.
In some cases, a charity may close down. So it’s also a good idea to include a section in your will about what should happen to the charitable gift if the charity stops existing. You could name another charity that you’d like to donate to in this case, or you could withdraw the gift. Decide what’s right for you should this happen. And don’t forget to ask for legal advice if you’re not sure how to add this detail into your will.
Give the trustees in your will the responsibility to donate to a charity or charities for you.
If you decide to give the responsibility of donating to a charity to the trustees of your will, the most important thing you can do is leave clear instructions. Letting them know exactly what you expect from them is the best way to make sure your final wishes are upheld.
Trustees of a will are responsible for receiving the assets from the estate of the person who’s passed away. They’re also required by the law to manage and distribute these assets.
Trustees of a will are responsible for receiving the assets from the estate of the person who’s passed away. They’re also required by the law to manage and distribute these assets.
What can you leave to charity in your will?
The obvious thing to leave to charity in your will is a lump sum of money. But if that’s not an option for you, you can also donate a personal belonging or property that could be of value. Perhaps you have a piece of jewellery you’d like to donate? Or antique furniture? All of this could go towards helping the charitable cause you’d like to support.
The other option when leaving money to charity in your will is to state that you’d like to leave behind a share (or all) of your ‘residual estate’ after other gifts and costs are shared out. This is the amount left over after the trustees named in your will are given their inheritance, after the probate solicitors are paid, and after any tax is paid.
But it’s worth keeping in mind that your estate may change over time. If, for example, your estate decreased significantly, your charitable donation may not be as much as you’d like. So it’s a good idea to keep an eye on your estate over time. That way, you can choose to change your will at a later date and leave a lump sum instead. Or if you find that your estate has grown over time and you’ve left your residual estate to a charity, this could end up being a much larger sum than you intended. And depending on the details of your will, it could leave beneficiaries with much less than the charity. So it’s always worth revisiting your will to make sure it reflects your current assets and what you really want to leave behind.
Can you tell a charity how to spend your donation?
You can ask a charity to spend or use your donation in a certain way. But it’s best not to simply leave the instructions in your will. Instead, get in touch with the charity to talk about what you had in mind. They’re more likely to agree with you if you approach them personally before you write your will. If you don’t make these arrangements with the charity before making your will then there are situations where they might have to refuse the gift because they can’t follow the instructions in your will.
Choosing a charity to leave a donation to in your will
Want to leave money to a charity in your will but not sure who to donate to? If you don’t have a charity in mind, here are a few things to consider before you decide:
- Take a look at the list of UK charities on the Charity Commission. Search by area, what the charity does, and who they help. This might help you figure out who you’d like to donate to. You can also check if there are any investigations or inquiries into how the charity operates here.
- Do your research. Take a look at their annual reports to get a better understanding of their aims and how much of their fundraising goes towards their cause and how much goes towards expenses.
- Think about which charities you relate to most or admire for the work that they do. Or do you have a personal connection with a charity that’s helped you or someone you know? It’s a personal choice. But you’ll know that it’s the right one when you feel proud to say you’re leaving a gift behind for them in your will.
Do you have to pay tax when you leave money to charity in your will?
You don’t have to pay any inheritance tax on money left to a charity in your will. In fact, you could benefit from leaving money to charity in your will. This is because the amount of money you leave to a charity will be deducted from your overall estate. This means that the overall inheritance tax you have to pay will be reduced. (Inheritance tax only applies to estates that are worth over £325,000.)
Can a charitable gift in your will be contested?
When leaving money to charity in your will the best thing you can do before going ahead is talking with your close family members about it. This is because it’s possible for beneficiaries to contest your will on the grounds that it does not leave them with enough financial provision when you pass away. This only applies to beneficiaries who were financially dependent such as a spouse, civil partner or child. The reason for this is because the law says your will has to provide reasonably for any financial dependents you have. The will could also be contested on the basis that you may not have been of sound mind, or under undue influence at the time of writing the will.
Undue influence is when someone makes changes to their will that they wouldn’t normally make because they’re put under pressure to do so by someone else.
Being open with your close family when writing a will is an important part of making sure that everything you wish to happen after you pass away is taken care of. Chatting with them about your wishes and making sure they’re on the same page will prevent any disputes and help you leave behind the legacy that you really want.
Image by Julia M Cameron on Pexels.
